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Thrillist: From a Simple Newsletter to $80 Million in Revenue

It was fall 2005, and Ben Lerer and Adam Rich, both semi-recent graduates of the University of Pennsylvania, were ready to send out the first installment of their email newsletter, a New York City guide for guys entitled Thrillist. Rich turned to Lerer. "How do we send it?" he asked.

"That's how absolutely stupid we were," Lerer (pictured above) recounted in a phone interview with Mashable. Today, Thrillist Media Group is a global media and ecommerce company with 250 employees and 25 local editions, reaching from Los Angeles to London. The company also sells products — mainly apparel and accessories — through JackThreads, a site it acquired in May 2010 and has since grown to a $40 million business. It also launched a second publication this spring called The Crosby Press, an online men's magazine targeting a slightly younger demographic: 18-to-24-year-olds. All together, the company is on track to bring in between $80 million and $100 million in revenue this year, according to a Thrillist spokesperson.

So how did Lerer and Rich take their vision from a simple email newsletter to a multi-brand content and commerce company? We called Lerer to find out.

A New Kind of City Guide

Thrillist's inception is not unlike the origin stories of many other companies: Two guys were looking for a product that didn't exist — in this case, a city guide that spoke to their particular demographic — and so they built it themselves.

Lerer and Rich studied the national men's magazines they liked which, in Lerer's words "spoke our language," and adapted their "no B.S." tone on content that was local, timely and actionable — the very stuff of city guides. Daily Candy had already done a good job of this for the women's market; Thrillist would deliver that service to men.

With no content and little tech background to speak of, the pair hit the streets of New York themselves, exploring neighborhoods on nights and weekends and writing their own version of a city guide, which they would send along to their friends every few days. As the subscriber count grew, Lerer and Rich began hearing from businesses that had noticed a bump when Thrillist wrote about them.

Lerer and Rich in the early days of the business.

They felt — tentatively — that they had a real business on their hands. Lerer quit his job at a boutique hotel company about two months after Thrillist started — partly to keep working on Thrillist, and partly to finish his business school applications. His parents, Huffington Post co-founder and venture capitalist Kenneth Lerer, and interior designer Katherine Sailer, were happy to support him. "I was a decently spoiled kid," he admitted. "It wasn't a burden on them while I sort of figured out what I was doing." Rich stayed on at his job, doing quality assurance for a tech company.

Three or four months into the business, Lerer and Rich decided to seek outside investment, knocking first on the doors of DailyCandy's investors. They were able to raise a few hundred thousand dollars — enough to pay themselves "small but serviceable salaries," by Lerer's description. "One of the great pieces of advice I got was to treat the money like it's yours, not like a bank account you have access to," Lerer says. "We don't let a penny get spent in a way we wouldn't spend our own money. It's made us incredibly meticulous and thoughtful."

The money allowed Rich to turn to Thrillist full-time. The pair also made their first hire: David Blend, now Thrillist's executive editor. "He was a freelance writer who believed in what we were doing," Lerer says. "In the beginning, we paid him in lumps of hamburger meat. We said, 'If we ever raise money, you'll be our first employee,' and he was."

Around Thrillist's one-year anniversary, it launched a local edition for Los Angeles. San Francisco, Chicago, Las Vegas and Miami followed in time, one after the other. Emailed newsletters were still the focus: "Even in 2008, the website was shitty," Lerer admits, acknowledging that the website is still important for those who want access to a broader array of archival content.

Thrillist also started building out its advertising business. Lerer's roles changed as the company's needs evolved: "I was our first sales person, then our first marketing person," Lerer recalls. "I held and trafficked the first ad myself; it was this totally humbling, crazy experience. I'm positive I could never do it again," he adds. "It was such a — almost a foolish amount of work. We were so patient, so spendthrift and careful, and I just don't think I have that kind of patience anymore."

Eyeing Ecommerce

In 2010, Lerer started a venture capital firm with his father, dubbed Lerer Ventures, which now backs companies such as Baublebar, Everlane and NowThisNews. Besides being a nice side gig, the move gave Lerer a look into other fast-growing businesses. He became interested in ecommerce businesses — particularly in the promising opportunities they presented.

Not long after, Thrillist acquired a small flash sales site for men's apparel, JackThreads. Thrillist had long been recommending — and driving purchases of — products. Now, it could choose products and sell them directly to its then-1.8 million subscribers.

"We had built a big audience of guys who trusted us, who took our recommendations to heart and acted upon them," Lerer explains. "But there was a part of the relationship missing. We'd tell them about a shirt, they'd buy it somewhere else, and they'd leave us — they'd lose the connection to our brand. More importantly, we didn't understand any of the data about what was happening out there. We knew we were driving a lot of traffic to retail, but we didn't know how much we were affecting guys' behavior. So we recognized we could be both a media business, with brands paying to get access to [our subscribers], and also drive some purchases to ourselves."

Lerer knew that Thrillist would have to be careful about recommending its own products if it wanted to maintain its readers' trust. "You have to be crazily careful to make sure you don't screw up the trust your audience has with you," Lerer says. "What we found is that if the things we're selling are awesome and of real quality, and the experience is great and transparent, we're providing a service to our guys. It's a totally virtuous cycle as long as quality is there."

The formula appears to be working. When JackThreads was acquired three years ago, it had less than $5 million in annual sales. Last year, it generated $40 million in revenue — a figure Lerer says he aims to grow still more aggressively.

Scaling Challenges

Growing Thrillist has come with all sorts of challenges, some technical — Lerer says Thrillist has cycled through three or four email providers at this point — and many more organizational.

"Training, oversight, management, having the right technology and tools — it has a lot to do with being organized," Lerer says. "We don't want tons of layers of management, but things start to break without a new layer."

Lerer says he stopped doing all the hiring himself around the 75 to 100-person mark, but that he is, of course, still involved in every senior hire and plenty of junior hires "in positions of specific interest to me." He says he can quite easily tell whether a candidate is a good cultural fit, and "if they have their eyes open and are paying attention." Today, experience weighs more heavily in a candidate's favor than in years past.

Though Lerer doesn't do all the hiring himself anymore, he still spends about 10 to 20% of his time on recruiting — the latest big hire being CFO Eric Ashman. The rest of his time is divided between product, the sales team, management of the company's board and simply "hanging out with people around the office."

What's Next

Looking at the next six months, Lerer says he's most excited about the evolution of the company's content and commerce business, which he hinted was undergoing a major rehaul. "Content and commerce is this sort of elusive beast I don't think anyone has laid eyes on yet," he said. "I think what we'll launch will make it shows its face soon. We're doing stuff no one else is doing, and I think it will make people start to really get content and commerce."

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